PAI BHAVAN CO-OPERATIVE HOUSING SOCIETY LIMITED,CARANZALIM vs. INCOME TAX OFFICER, WARD - 1(4), PANAJI

Coming to the assessee’s sole substantive grievance that both the lower authorities have erred in law and on facts in rejecting its sec.80P(2) deduction claim of Rs.3,06,300/- representing interest derived from cooperative banks, it emerges that the same no more res integra in light of the tribunal’s latest coordinate bench’s order in 2 ITA.No.50/PAN./2020 ITA.No.615/PUN./2022 DCIT vs. Bhimashankar Sahakari Sakhar Karkhana Ltd. Pune dated 21.12.2022 reading as under :

“2. In this appeal, the Revenue is aggrieved by the grant of deduction u/s.80P of the Income-tax Act, 1961 (hereinafter also called ‘the Act’). Briefly stated, the facts of the case, are that the assessee is a co-operative society, who filed return its declaring total income at Rs.32,53,300/-. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee claimed deduction u/s.80P in respect of interest income and also dividend on investments with another cooperative society. The assessee’s claim that such an amount of interest/dividend was eligible for deduction u/s.80P got jettisoned by the AO who refused deduction under this provision for a sum of Rs.6.03 crore. The ld. CIT(A) overturned the assessment order on this score. Aggrieved thereby, the Revenue has come up in appeal before the Tribunal challenging the order passed by the ld. CIT(A).

We have heard the learned DR and gone through the material on record. There is no appearance from the side of the assessees despite notice. We are, therefore, proceeding to this dispose of the appeals ex parte qua the assessees.

The assessees claimed deduction u/s 80P(2)(a)(i)/80P(2)(d) of the Act, which was denied by the AO but restored in the first appeal. Insofar as the allowability of deduction u/s.8P(2)(a)(i) is concerned, we find that the Pune Benches of the Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit Vs. The Pr.CIT (ITA No.713/PUN/2016) has decided the question of availability of deduction u/s 80P on interest income by 4 ITA.No.50/PAN./2020 noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit Vs. ITO (ITA No.604/PN/2014) has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon’ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309 (Kar.) allowing deduction u/s. 80P on interest income and that of the Hon’ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing deduction u/s.80P on interest income earned from banks. Both the Hon’ble High Courts took into consideration the ratio laid down in the case of Totgar’s Cooperative Sale Society Ltd. (supra). No direct judgment from the Hon’ble jurisdictional High Court on the point having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). The position continues to remain the same before this Tribunal also.

In view of the fact that the Pune Benches of the Tribunal in series of decisions have held that the co- operative societies are entitled to deduction 6 ITA.No.50/PAN./2020 u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, we hold that the impugned orders do not require any interference.”

The Revenue is fair enough in not pinpointing any distinction on facts or law so far as the instant issue of sec.80P deduction is concerned. The assessee’s sole substantive ground hereinabove succeeds therefore. Ordered accordingly.